Aviva 2009 Annual Report Download - page 200

198
2009
Aviva plc Notes to the consolidated financial statements continued
Annual Report and Accounts 2009
26 – Deferred acquisition costs and other assets continued
(b) Movements in the year
The movements in deferred acquisition costs during the year were:
General Retail fund
Long-term
business
insurance
and health
business
manage-
ment
business Total
£m £m £m £m
Carrying amount at 1 January
Acquisition costs deferred during the year
Amortisation
Impact of assumption changes
Effect of portfolio transfers, acquisitions and disposals
Foreign exchange rate movements
Shadow adjustment
4,455
1,123
(468)
94
(40)
(338)
(757)
1,489
2,209
(2,464)
—
—
(7)
—
22
8
(9)
(1)
—
—
—
5,966
3,340
(2,941)
93
(40)
(345)
(757)
Carrying amount at 31 December 4,069 1,227 20 5,316
General Retail fund
Long-term
business
insurance
and health
business
manage-
ment
business Total
£m £m £m £m
Carrying amount at 1 January
Acquisition costs deferred during the year
Amortisation
Impairment losses
Impact of assumption changes
Effect of portfolio transfers, acquisitions and disposals
Foreign exchange rate movements
Shadow adjustment
2,711
1,513
(682)
(100)
(281)
3
808
483
1,583
2,660
(2,828)
—
(4)
(1)
79
—
27
4
(9)
—
—
—
—
—
4,321
4,177
(3,519)
(100)
(285)
2
887
483
Carrying amount at 31 December 4,455 1,489 22 5,966
The level of capitalised acquisition costs for new long-term business reduced by £390 million in 2009, reflecting lower new
business in the US. The amortisation reduced by £214 million in 2009, mainly in the UK where improved asset values impacted
on projected profits, particularly management charges on unit-linked funds, leading to lower amortisation.
Where amortisation of the DAC balance depends on projected profits, changes to economic conditions may lead to a
movement in the DAC balance and a corresponding impact on profit. It is estimated that the movement in DAC balance would
reduce profit by £5 million if market yields on fixed income investments were to reduce by 1% and reduce profit by £20 million
if equity and property market values were to fall by 10% from year end 2009 levels.
The shadow adjustments relate to deferred acquisition costs on business in the United States backed by investments classified
as available for sale. As explained in accounting policy K, unrealised gains and losses on the AFS investments and the shadow
adjustments above are both recognised directly in other comprehensive income.
(c) Other assets
Other assets include £1 million (2008: £1 million, 2007: £66 million) that is expected to be recovered more than one year after
the statement of financial position date.
(d) Prepayments and accrued income
Prepayments and accrued income of £3,604 million (2008: £3,762 million, 2007: £2,986 million) , include £148 million
(2008: £259 million, 2007: £111 million) that is expected to be recovered more than one year after the statement of
financial position date.
2008